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Brexit: 'Horrified' firms warn time is running out

Getty Images Brexit alarm clockGetty Images

British business groups have criticised politicians for focusing on in-fighting rather than preparing for Brexit, warning that there is not enough time to prepare for a no-deal scenario.

With 100 days to go before the UK leaves the EU, the groups say firms have been "watching in horror" at the ongoing rows within Westminster.

The cabinet met on Tuesday to ramp up preparations for a no-deal departure.

But the groups say the idea that "no-deal" can be managed is not credible.

In other Brexit developments:

  • The EU is to push ahead with its planning for Brexit, including if there is no deal, with the European Commission set to publish legislation to ensure continuity in some sectors on a temporary basis
  • The SNP and other opposition parties table a vote of no confidence in the UK government - but it is understood the government only has to give time to motions tabled in the name of the Leader of the Opposition
  • Prime Minister Theresa May is to urge the first ministers of Scotland and Wales to back her Brexit deal at a summit in London
  • The Public Accounts Committee of MPs says the government has not done enough to secure the supply of medical equipment in a no-deal scenario.

In a joint statement, the British Chambers of Commerce, the Confederation of British Industry, manufacturers' organisation the EEF, the Federation of Small Businesses and the Institute of Directors said: "Businesses have been watching in horror as politicians have focused on factional disputes rather than practical steps that business needs to move forward.

"The lack of progress in Westminster means that the risk of a no-deal Brexit is rising."

The government said on Tuesday that it had sent letters to 140,000 businesses, urging them to trigger their no-deal contingency plans as appropriate.

It will also distribute 100-page information packs on Friday.

Getty Images Carolyn Fairbairn, director general of the CBIGetty Images
CBI director general Carolyn Fairbairn has joined her fellow business groups in warning against a disorderly no-deal Brexit on 29 March

The five business groups, which represent hundreds of thousands of UK firms, said that because of a lack of progress, the government "is understandably now in a place where it must step up no-deal planning".

But they say: "It is clear there is simply not enough time to prevent severe dislocation and disruption in just 100 days.

"This is not where we should be."

Contingency planning

The business groups said that instead of investing money and boosting productivity, companies were now having to divert capital for no-deal contingency planning.

They also warned: "There are also hundreds of thousands who have yet to start - and cannot be expected to be ready in such a short space of time."

Some companies told BBC News that they had already taken steps to invest in EU countries because of the uncertainty.

Ian McCartney, director of strategy at Wilson Tool, which has opened a branch in Germany, said: "It's hard to believe in business how messy it is in politics. There's absolutely zero certainty in Westminster."

Shaun Loughlin, managing director of FreestyleXtreme
March is too late for a deal, says sports clothing exporter Shaun Loughlin

Sports clothing exporter FreestyleXtreme has opened an office in Romania and is planning to open a warehouse in Germany.

Managing director Shaun Loughlin said businesses needed to know there would be a deal "tomorrow", not in March.

"This is the last chance, there is not going to be another chance. Once we move, we've moved, we won't be coming back," he said.

A spokesman for the prime minister said that with just over three months until the UK leaves the European Union, "we have now reached the point where we need to ramp up these preparations".

Businesses should also be prepared, "enacting their own no-deal plans as they judge necessary".

Eight areas

The European Commission is publishing the legislation needed to ensure continuity in eight sectors on a temporary basis.

Those areas cover data protection, plant and animal health, customs, climate policy, some narrow financial products and the rights of British people living in the European Union.

If there is no Brexit deal, these will apply from 29 March until the end of 2019 at the latest.

The UK is due to leave the EU on 29 March after a referendum in 2016.

It and the EU have agreed a withdrawal agreement - or "divorce deal" - and a political declaration outlining ambition for future talks - but it needs to be agreed by Parliament for it to come into force.

A vote by MPs on the deal had been scheduled for 11 December, but Mrs May postponed it until January after it was clear her deal would be rejected, leading to widespread anger in the Commons.